Spring Budget ’17: Hammond’s speech in full

by: Mortgage Solutions

Chancellor Philip Hammond spoke for an hour delivering his Spring Budget 2017 to Parliament. Here is his speech in full.

Mr Deputy Speaker,

I report today on an economy that has continued to confound the commentators with robust growth.

A labour market delivering record employment.

And a deficit down by over two-thirds.

As we start our negotiations to exit the European Union, this Budget takes forward our plan to prepare Britain for a brighter future.

It provides a strong and stable platform for those negotiations.

It extends opportunity to all our young people.

It delivers further investment in our public services.

And it continues the task of getting Britain back to living within its means.

We are building the foundations of a stronger, fairer, more global Britain.

Mr Deputy Speaker,

As the House knows, this will be the last Spring Budget.

The Treasury has helpfully reminded me that I am not the first Chancellor to announce the “last spring Budget”

Twenty four-years ago Norman Lamont also presented what was billed then as “the last Spring Budget”.

He reported on an economy that was growing faster than any other in the G7, and he committed to continued restraint in public spending.

The then Prime Minister described it as the “right budget, at the right time, from the right Chancellor”.

What they failed to remind me was…ten weeks later, he was sacked!

So wish me luck!

Mr Deputy Speaker,

Last year, the British economy grew faster than the United States, faster than Japan, faster than France.

Indeed amongst the major advanced economies Britain’s growth in 2016 was second only to Germany.

Employment is at a record high. Unemployment is at an 11 year low, with over 2.7 million more people enjoying the security and dignity of work than in 2010.

A far cry from the 3 million unemployed predicted.

And I am pleased to report, on International Women’s Day, that there is now a higher proportion of women in work than ever before.

But, Mr Deputy Speaker, there is no room for complacency.

As we prepare for our future outside the EU, we cannot rest on our past achievements.

We must focus relentlessly on keeping Britain at the cutting edge of the global economy. The deficit is down, but debt is still too high.

Employment is up, but productivity remains stubbornly low.

Too many of our young people are leaving formal education without the skills they need for today’s labour market.

And too many families are still feeling the squeeze, almost a decade after the crash.

So our job is not done.

And our task today is to take the next steps in preparing Britain for a global future.

To equip our young people with the skills they need.

To support our public services.

And to help ordinary working families as we build an economy that works for everyone.

Mr Deputy Speaker,

I thank the OBR under Robert Chote for their report

And let me also take the opportunity to thank my RHF the Chief Secretary and my ministerial team who are the unsung heroes of the Budget.

Doing much of the heavy lifting over the last few weeks, and of course, my excellent PPS, my RHF the Member for Salisbury.

I turn now to the OBR forecasts.

This is the spreadsheet bit.

I’ve got a reputation to uphold.

The OBR forecast the level of GDP in 2021 to be broadly the same as at Autumn Statement.

However, the path by which we get there has changed.

Reflecting the recent strength in the economy, the OBR has upgraded its forecast for growth this year from 1.4% to 2%.

In 2018 growth is forecast to slow to 1.6%, before picking up to 1.7%, then 1.9%, and back to 2% in 2021.

Resilience in the economy is reflected in a strong labour market.

Since 2010, the employment rate has risen from 70.2% to 74.6%, with positive news for all parts of our United Kingdom.

Unemployment has fallen fastest in Yorkshire and the Humber, and Wales.

Wages have grown fastest in Northern Ireland.

And productivity has grown fastest in Scotland and the North East.

And this positive trend is set to continue over the forecast period.

The number of people in employment is set to grow in every year, with a further two-thirds of a million people in work by 2021.

The OBR forecast inflation at 2.4% this year. Then 2.3% next year and 2% in 2019.

And most importantly, Mr Deputy Speaker, despite higher-than-target inflation, real wages continue to rise in every year of the forecast.

Mr Deputy Speaker,

While the economic forecasts are broadly unchanged since the autumn, the OBR has substantially revised down its short term forecast of Public Sector Net Borrowing.

The OBR attributes this change to a number of one-off factors that they do not expect to lead to a structural improvement over the forecast period.

Combining these factors with the higher short-term forecast for growth, and taking into account the measures I shall announce today the OBR now forecasts borrowing in 2016-17, to be £16.4 billion lower than forecast in the autumn, at £51.7 billion.

Then £58.3 billion in 2017-18; £40.8 billion in 2018-19; then £21.4 billion; £20.6 billion; and finally £16.8 billion in 2021-22.

All, lower than forecast at Autumn Statement.

Overall public sector net borrowing as a percentage of GDP is predicted to fall from 3.8% last year to 2.6% this year.

And for those who care about such things, it means we are forecast to meet our 3% EU Stability and Growth Pact target this year for the first time in almost a decade.

But I won’t hold my breath for my congratulatory letter from Jean-Claude Juncker!

Borrowing is then forecast to be 2.9% in 17-18 and then to fall over the remainder of the Parliament, to 1.9% in 2018-19, then 1%; and 0.9%, before reaching 0.7% in ‘21-22 – its lowest level in two decades.

The OBR expects cyclically adjusted public sector net borrowing to be 0.9% in 2020-2021, giving us £26 billion of headroom against the headline 2% target in our new fiscal rules, maintaining our fiscal resilience over the period.

The OBR’s forecast of lower near-term borrowing, coupled with recent strength in the economy, means lower debt across the period.

The OBR now forecast that debt will rise to 86.6% this year, before peaking at 88.8% next year; 1.4 percentage points lower than forecast in the autumn.

It then falls in 2018-19, for the first time since 2001-02 to 88.5%, it then continues to decline to 86.9% in 2019-20, 83%, in 2020-21 and then reaches 79.8% in 2021-22.

Mr Deputy Speaker,

At the Autumn Statement I set out our plan to return the public finances to balance in the next Parliament.

A plan that is now underpinned by our new fiscal rules.

That plan strikes the right balance between reducing our deficit, preserving fiscal flexibility and investing in Britain’s future.

Some have argued that lower borrowing this year makes a case for more unfunded spending in the future.

I disagree.

Britain has a debt of nearly £1.7 trillion, almost £62,000 for every household in the country.

Each year, we are spending £50 billion on debt interest – more than we spend on Defence and Policing combined.

And borrowing over the forecast period is still set to be £100 billion higher than predicted at Budget 2016.

So the only responsible course of action, Mr Deputy Speaker, is to continue with our plan, undeterred by any short-term fluctuations.

We will not saddle our children with ever-increasing debts.

So the Budget I set out today will again fund all additional spending decisions over the forecast period.

Mr Deputy Speaker,

A strong economy needs a fair, stable and competitive tax system, creating the growth that will underpin our future prosperity.

My ambition is for the UK to be the best place in the world to start and grow a business.

In 2010 Corporation Tax was 28%.

From April this year, it will fall to 19%, the lowest rate in the G20.

In 2020, it will fall again to 17%, sending the clearest possible signal that Britain is open for business.

Mr Deputy Speaker,

I am listening to the voice of business.

As I committed at the Autumn Statement, we’ve reviewed, with business, our R&D tax credit regime and concluded that it is globally competitive.

But to make the UK even more attractive for R&D we have accepted industry calls for a reduction in administrative burdens around the scheme and will shortly bring forward measures to deliver them.

In a digital age, it is right that we develop a digital tax system.

But in response to concerns about the timetable expressed by business organisations, and by several of my RHFs including the Chairman of the Treasury Select Committee.

I have decided that for businesses with turnover below the VAT registration threshold I will delay by one year the introduction of quarterly reporting at a cost to the Exchequer of £280 million

And I have heard, too, the calls by North Sea oil and gas producers and the Scottish Government to provide further support for the transfer of late-life assets.

As UK oil and gas production declines it is essential that we maximise exploitation of remaining reserves and so we will publish a formal discussion paper in due course.

And Mr Deputy Speaker, there’s one further area in which I can announce action to back British businesses.

My RHF the Communities Secretary and I have listened to the concerns raised by colleagues and businesses about the effects of the 2017 business rates revaluation.

Business Rates raise £25 billion per year – all of which, by 2020, will be going to fund local government.

So we cannot abolish them, as some have suggested.

But, it is certainly true, in the medium term that we have to find a better way of taxing the digital part of the economy.

The part that does not use bricks and mortar.

But in the meantime, there is scope to reform the revaluation process, making it smoother and more frequent, to avoid the dramatic increases that the present system can deliver.

We will set out our preferred approach in due course and will consult on it before the next revaluation is due.

The revaluation itself is, by law, fiscally neutral.

And ahead of this revaluation, the government committed to a package of cuts to business rates now worth nearly £9 billion, permanently doubling the rate of Small Business Rate Relief to 100%, and raising the thresholds so that 600,000 small businesses are taken out of paying rates altogether.

But the revaluation has undoubtedly raised some hard cases, especially for those businesses coming out of Small Business Relief.

So today, as I promised many of my RHFs I would, I address those concerns with three measures which apply to the national business rates system for England.

First, any business coming out of Small Business Rate Relief will benefit from an additional cap.

No business losing small business rate relief will see their bill increase next year by more than £50 a month, and the subsequent increases will be capped at either the transitional relief cap or £50 a month, whichever is higher.

Second, recognising the valuable role that local pubs play in our communities, I will provide a £1,000 discount on business rates bills in 2017 for all pubs with a Rateable Value of less than £100,000 – that’s 90% of all pubs.

And third, I will provide local authorities with a £300 million fund to deliver discretionary relief to target individual hard cases in their local areas.

This fund will be allocated to local authorities by formula, and my RHF will set out details in due course.

Taken together, this is a further £435 million cut in business rates, targeted at those small businesses facing the biggest increases, protecting our pubs, and giving local authorities the resource to respond flexibly to local circumstances.

Mr Deputy Speaker,

Just as a strong economy requires a tax system that is competitive, a strong society requires one which is fair.

And because I have committed to funding my spending decisions in this Budget, rather than borrowing more I make no apology for raising additional revenues, and for doing so in ways which enhance the fairness of the system.

First and foremost, that means collecting the taxes that are due.

Since 2010, we have secured £140 billion in additional tax revenue by taking robust action to tackle avoidance, evasion, and non-compliance.

These actions have helped the UK achieve one of the lowest tax gaps in the world.

But there is more that we can do.

In this Budget we set out further action to stop businesses from converting capital losses into trading losses, tackle abuse of foreign pension schemes, introduce UK VAT on roaming telecoms services outside the EU in line with international standard practice.

And from July we will introduce a tough new financial penalty for professionals who enable a tax avoidance arrangement that is later defeated by HMRC.

Taken together these measures will raise £820 million over the forecast period.

Mr Deputy Speaker, as well as collecting taxes that are due, a fair system ensures that those with the broadest shoulders bear the heaviest burden.

As a result of the changes we’ve made since 2010 the top 1 per cent of income tax payers now pay 27 per cent of all income tax.

But a fair system will also ensure fairness between individuals, so that people doing similar work for similar wages and enjoying similar state benefits pay similar levels of tax.

As our economy responds to the challenges of globalisation, shifts in demographics, and the emergence of new technologies we have seen a dramatic increase in the number of people working as self-employed or through their own companies.

Indeed, many of our most highly-paid professionals work through Limited Liability Partnerships and are treated as self-employed.

There are many good reasons for choosing to be self-employed or working through a company.

Indeed, Mr Deputy Speaker, I have done both in my time!

And I will always encourage and support the entrepreneurs and the innovators who are the lifeblood of our economy.

People should have choices about how they work, but those choices should not be driven primarily by differences in tax treatment.

The Prime Minister has asked Matthew Taylor, Chief Executive of the RSA, to consider the wider implications of different employment practices.

I look forward to his final report in the summer, and am grateful to him for sharing his preliminary thoughts.

He is clear that differences in tax treatment are a key driver behind the trends we are observing. A conclusion shared by the IFS and the Resolution Foundation.

An employee earning £32,000 will incur between him and his employer £6,170 of National Insurance Contributions.

A self-employed person earning the equivalent amount will pay just £2,300 – significantly less than half as much.

Historically, the differences in NICs between those in employment and the self-employed reflected differences in state pensions and contributory welfare benefits.

But with the introduction of the new state pension, these differences have been very substantially reduced.

Since 2016 self-employed workers now build up the same entitlement to the state pension as employees, a big pension boost to the self-employed.

The most significant remaining area of difference is in relation to parental benefits, and I can announce today that we will consult in the summer on options to address the disparities in this area as the FSB and others have proposed.

Mr Deputy Speaker, The difference in National Insurance Contributions is no longer justified by the difference in benefits entitlement.

Such dramatically different treatment of two people earning essentially the same undermines the fairness of the tax system.

Employed and self-employed alike use our public services in the same way, but they are not paying for them in the same way.

The lower National Insurance paid by the self-employed is forecast to cost our public finances over £5 billion this year alone.

That is not fair to the 85% of workers who are employees.

The abolition of Class 2 NICs for self-employed people, announced by my predecessor in 2016 and due to take effect in 2018, would further increase the gap between employment and self-employment.

To be able to support our public services in this budget, and to improve the fairness of the tax system, I will act to reduce the gap to better reflect the current differences in state benefits.

I have considered the possibility of simply reversing the decision to abolish Class 2 contributions, but the Class 2 NIC is regressive and outdated.

It is right that it should go.

So, instead, from April 2018, when the Class 2 NIC is abolished, the main rate of Class 4 NICs for the self-employed will increase by 1% to 10%, with a further 1% increase in April 2019.

The combination of the abolition of Class 2 and the Class 4 increases I have announced today, raises a net £145m a year for our public services by 2021-22, an average of around 60p a week per self-employed person in this country.

And since Class 2 contributions are payable at a flat rate, while Class 4 is chargeable as a proportion of profits, all self-employed people earning less than £16,250 will still see a reduction in their total NICs bill.

This change reduces the unfairness in the NICs system and reflects more accurately the current differences in benefits available from the state.

Mr Deputy Speaker,

Alongside the gap between employees and the self-employed there is a parallel unfairness in the treatment of those working through their own companies.

Britain has the most competitive corporate tax regime in the G7, and we are determined to make Britain the most attractive place to start and grow a business.

But to do that, we must ensure that our corporate tax regime does not encourage people across the economy to form companies simply to reduce tax liabilities, pushing the burden of financing our public services onto others.

HMRC estimates that existing incorporations cost the public finances over £6bn a year and the OBR forecast an additional annual cost to the Exchequer from those choosing to incorporate of £3.5 billion a year by 2021-22.

The gap in total tax and NICs between an employed worker and one who has set up his own company will normally be greater even than the gap with the self-employed, and there are several perfectly legal ways in which that gap can be made bigger still.

This is not fair.

And it’s not affordable.

Fairness demands that this discrepancy in treatment is addressed, just as I have addressed the discrepancy with the self-employed.

The Dividend Allowance has increased the tax advantage of incorporation.

It allows each Director/Shareholder to take £5,000 of dividends out of their company tax free, over and above the personal allowance.

It is also an extremely generous tax break for investors with substantial share portfolios.

I have decided, therefore, to address the unfairness around Director/Shareholders’ tax advantage, and at the same time raise some much needed-revenue to fund the measures I shall announce today, by reducing the tax-free dividend allowance from £5,000 to £2,000 with effect from April 2018.

About half the people affected by this measure are Director/Shareholders of private companies.

The rest are investors in shares with holdings worth, typically, over £50,000 outside ISAs.

And of course everyone will benefit from the generous £4,760 increase in the annual ISA allowance, to £20,000, and the further increase in the personal allowance to £11,500 from April.

Mr Deputy Speaker,

I now turn to duties and levies.

Unusually for a Chancellor, I am delighted to announce a reduction in the expected yield of a tax – the soft drinks levy.

I can confirm today the final rates of 18 and 24 pence per litre for the main and higher bands respectively.

But producers are already reformulating sugar out of their drinks, which means a lower revenue forecast for this tax.

This is good news for our children.

And in further good news for them, I can confirm that we will nonetheless fund Department for Education with the full £1 billion we originally expected from the levy this Parliament, to invest in school sports and healthy living programmes.

I am freezing for another year both the VED rates for hauliers and the HGV Road User Levy.

I am introducing a new minimum excise duty on cigarettes based on a pack price of £7.35.

And I can also confirm that I will make no changes to previously planned upratings of duties on alcohol and tobacco.

The tax measures I have announced enhance the sustainability of our public services into the future.

And by improving the fairness of the system, helps us to keep tax rates low.

Mr Deputy Speaker,

Economic policy does not exist in a vacuum, and economic growth is a means, not an end in itself.

The objective of our economic policy is to support ordinary working families, and to build an economy that works for them.

We know that we can only achieve rising living standards and deliver investment in our vital public services if we have a strong economy and sustainable public finances. We start from a strong base.

Real wages have grown for 27 straight months.

The wages of the lowest paid grew faster last year than in any of the last 20 years.

And the poorest households have seen their labour incomes rise more since 2010 than in any other country in the G7.

Last year we delivered a pay rise to over a million of the lowest paid through the National Living Wage.

And next month we take more steps to support working families with the cost of living:

The national living wage will rise again to £7.50 in April. That’s over £500 more for a full-time worker than this year, and £1,400 more than when the National Living Wage was introduced;

The personal allowance will rise for the seventh year in a row to £11,500, and the higher rate threshold to £45,000.

29 million people will be better off, with a typical basic rate taxpayer paying £1,000 less than in 2010.

And we will meet our manifesto commitment to increasing the thresholds to £12,500 and £50,000 respectively by the end of this Parliament.

I can also confirm today that the new NS&I bond I announced at Autumn Statement will be available from April and will pay 2.2% on deposits up to £3,000, a welcome break for hard-pressed savers.

And the Universal Credit taper rate will be reduced in April from 65% to 63%, cutting tax for 3 million families on low incomes.

And Mr Deputy Speaker,

Next month we will see the introduction of our flagship Tax-Free Childcare policy, which will allow working families across the UK to receive up to £2,000 a year towards the cost of childcare for each child under 12.

The scheme will be rolled out to all eligible parents by the end of the year.

And from September, working parents with three and four year olds will get their free childcare entitlement doubled to 30 hours a week.

That’s worth around £5,000 a year to a young family with a three year old and both parents working.

By the end of this parliament, government spending on childcare will have reached £6 billion a year.

These childcare measures represent a further huge step forward in support for ordinary working families, and for women in the workplace.

And I’m delighted to use the occasion of International Women’s Day, to announce three additional measures.

I will commit a further £20 million of government funding to support the campaign against Violence Against Women and Girls, taking the government’s commitment to this campaign to over £100 million this Parliament.

That’s on top of the Tampon Tax, which today delivers another £12 million in support of women’s charities across the UK.

I will also commit £5 million to promoting ‘returnships’ to the public and private sector, helping people back into employment after a career break;

And Mr Deputy Speaker.

Next year is the Centenary of the 1918 Representation of the People Act, the decisive step in the political emancipation of women in this country.

I will commit a further £5 million to projects to celebrate this centenary, and to educate young people about its significance;

Mr Deputy Speaker,

As well as knowing the government is on their side, people want to know that they’re getting a good deal from private markets too.

A well-functioning market economy is the best way to deliver prosperity and security to working families.

But government recognises that sometimes markets, particularly in fast developing areas of the economy, can fail people.

Sometimes, the market does not deliver the outcome the text books suggest it should.

And when that happens, this government will not hesitate to intervene.

We will shortly bring forward a green paper on protecting the interests of consumers.

But ahead of the Green Paper, we will take the first steps to protect consumer from unexpected fees or unfair clauses, to simplify terms and conditions, and to give consumer bodies greater enforcement powers.

Together, Mr Deputy Speaker, these measures will boost incomes, help family budgets stretch a little further, support parents back into work and tackle some of the frustrations that sometimes make it feel that the dice are loaded against ordinary working people going about their everyday lives.

Mr Deputy Speaker,

This House knows, that the only sustainable way to raise living standards is to improve our productivity growth.

Simply put, higher productivity means higher pay.

The stats are well known.

We are 35% behind Germany and 18% behind the G7 average.

And the gap is not closing.

Mr Deputy Speaker,

Investment in training, and investment in infrastructure, will start to close this gap and this government places addressing the UK’s productivity challenge at the very heart of its economic plan.

Because the cornerstone of an economy that works for everyone must be rising living standards for ordinary working people.

A key element of our plan is the £23 billion of additional infrastructure and innovation investment that I announced at the Autumn Statement.

Today to enhance the UK’s position as a world leader in science and innovation, I am allocating £300 million of the fund to support the brightest and the best research talent, including support for 1000 new PhD places and fellowships, focused on STEM subjects.

£270 million to keep the UK at the forefront of disruptive technologies like biotech, robotic systems and driverless vehicles.

£16 million for a new 5G mobile technology hub.

And £200 million for local projects to leverage private sector investment in full-fibre broadband networks.

On transport, I’m today announcing £90m for the North and £23 million for the Midlands from a £220 million fund that addresses pinch-points on the national road network.

And I am launching a £690 million competition for local authorities across England to tackle urban congestion and get local transport networks moving again.

My RHF the Transport Secretary will announce details shorty. And because we believe local areas understand local productivity barriers better than central government, we make further progress with our plans to bolster the regions.

In May, powerful mayors will be elected in six of our great cities.

Across Britain, local areas will take control of their own economic destiny.

And we will support them. I can inform the House that I have reached a deal with the Mayor of London on further devolution.

And I will follow the launch of the Northern Powerhouse Strategy at Autumn Statement, by publishing tomorrow our Midlands Engine Strategy, addressing productivity barriers across the Midlands.

Demonstrating once again that we are stronger together, in this great, United Kingdom.

Mr Deputy Speaker,

Perhaps the single most important thing government can do to support ordinary working families is to invest in the future, so that their children and grandchildren can make the most of the opportunities ahead.

That means addressing the skills gap and ensuring that every child – regardless of background – has the opportunity to go to a good or outstanding school.

At Autumn Statement I focused on investment in infrastructure.

The next step today in our plan to raise productivity and living standards is to focus on the quality of our children’s education and the teaching of technical skills.

Because investing in skills and education is the key to inclusive growth – to an economy that works for everyone.

And, Mr Deputy Speaker,

If you talk to people from any background and any part of the country about their hopes and their aspirations for the future, you’ll hear a recurring concern for the next generation. Will they have the qualifications to find a job?

Will they have the skills to re-train as that job changes, and changes again, over a working lifetime?

Will they be able to get on the housing ladder?

To save for a pension?

In short, the question that concerns so many people is “will our children enjoy the same opportunities that we did”?

Mr Deputy Speaker, Our job is to make sure that they do.

That’s why we are investing in education and skills to ensure that every young person, whatever their background and wherever they live, has the opportunity to succeed and prosper. The proportion of young people not in work or education is now the lowest since records began that’s a good base from which to build. But it is only by equipping them for the jobs of tomorrow that we ensure they will have real economic security.

We’ve put education reform at the heart of our agenda since 2010.

And that commitment is already paying off.

89 per cent of schools in England are now rated “good” or “outstanding” – the highest proportion every recorded.

That’s 1.8 million more children being taught in good or outstanding schools than in 2010.

It will remove the barriers that prevent more good faith-based free schools from opening

And it will enable the creation of new selective free schools.

So that the most academically-gifted children get specialist support to fulfil their potential.

And today I can announce funding for a further 110 new free schools, on top of the current commitment to 500.

This will include new specialist maths schools to build on the clear success of Exeter Mathematics School and King’s College London Maths School – which my RHF the Prime Minister visited earlier this week.

We commit to this programme because we understand that choice is the key to excellence in education.

But we recognise that for many parents the cost of travel can be a barrier to exercising that choice.

Pupils typically travel three times as far to attend selective schools, so we will extend free school transport to include all children on free school meals who attend a selective school. Because we are resolved that talent alone should determine the opportunities a child enjoys.

We’ll invest in our existing schools too – by providing an additional £216 million over the next three years, taking total investment in school condition to well over £10 billion in this Parliament.

Mr Deputy Speaker,

Good schools are the bedrock of our education system.

But we need to do more to support our young adults into quality jobs and help them gain world-class skills.

And while we have an academic route in this country that is undeniably one of the best in the world, the truth is that we languish near the bottom of the international league tables for technical education.

Our rigorous, well recognised system of A-levels provides students with the qualifications to move into our world-class Higher Education system.

We support this route further today by offering maintenance loans to part time undergraduates and doctoral loans in all subjects for the first time.

But long ago, our competitors in Germany and the US realised that to compete in the fast moving global economy, you have to link skills to jobs.

And, I am pleased to report, in National Apprenticeship Week, that our apprenticeship route is now, finally, delivering that ambition here, with 2.4 million apprenticeship starts in the last Parliament, and the launch of the Apprenticeship Levy in April supporting a further 3 million apprenticeships by 2020.

But there is still a lingering doubt about the parity of esteem attaching to technical education pursued through the Further Education route.

Today we end that doubt for good, with the introduction of T-Levels.

Thanks to the work of Lord Sainsbury, Baroness Wolf and other experts in this field, we have a blueprint to follow.

Their review concluded that students need a much clearer system of qualifications.

One that is designed and recognised by employers with clear routes into work, more time in the classroom, and good quality work placements.

One that replaces the 13,000 or so, different qualifications, with just 15 clear, career-focused routes.

Delivering on those recommendations is the third part of our plan.

So today, we will invest to deliver, in full, these game-changing reforms.

We will increase by over 50% the number of hours training for 16-19 year old technical students, including a high-quality 3 month work placement for every students, so when they qualify, they are genuinely “work-ready”.

Once this programme is fully rolled out, we will be investing an additional £500m a year in our 16-19 year olds.

And to encourage and support the best of them to go on to advanced technical study, we will offer maintenance loans for those undertaking higher level technical qualifications at the new Institutes of Technology and National Colleges.

Just as we do for those attending University.

Putting the next generation first, to safeguard their future, and to secure our economy.

Mr Deputy Speaker,

Because changing labour markets will mean that re-training is vital, with many of our young people today needing to retrain at least once, and perhaps more often, during a working life that may span more than 50 years.

We will consider how best to deliver high quality learning and training throughout working lives.

Department for Education will invest up to £40m in pilots to test the effectiveness of different approaches to lifelong learning.

So that we can identify what works best and help the next generation learn and train throughout their lives.

Mr Deputy Speaker,

Just as the principle that every child should have the opportunity to fulfil his or her potential is central to the government’s values, so is the principle that everyone has access to our NHS when they need it.

And that everyone should enjoy security and dignity in old age.

Today, our social care system cares for over a million people and I pay tribute to the hundreds of thousands of carers, who work in it.

But the system is clearly under pressure. And this in turn puts pressure on our NHS.

Today, there are half a million more people aged over 75 than there were in 2010.

And there will be 2 million more in ten years’ time.

That is why the government has already delivered more than £7 billion extra spending power to the system over the next three years.

And it is why we are ensuring that local authorities and the NHS work more closely together.

To enable elderly patients to be discharged when they are ready, freeing up precious NHS beds, and ensuring that elderly people are receiving the care they need.

Today I am committing additional grant funding of £2 billion to social care in England over the next 3 years, with £1 billion available in 17-18.

This will allow local authorities to act now to commission new care packages.

Of course, this is not only about money.

While there are many excellent examples of best practice around the country, at the other end of the scale, just 24 local authorities are responsible for over half of all delayed discharges to social care.

So, alongside additional funding, the Health and Communities Secretaries will announce measures to identify and support authorities which are struggling, and to ensure more joined up working with the NHS.

These measures, and greater collaborative working under NHS Sustainability and Transformation Plans, will bring short and medium-term benefits.

But the long-term challenges of sustainably funding care in older age requires a strategic approach.

And the government will set out its thinking on the options for the future financing of Social Care in a Green Paper later this year.

For the avoidance of doubt, Mr Deputy Speaker, those options do not include, and never have included, a Death Tax.

The social care funding package I have announced today will deliver immediate benefit to the NHS allowing it to re-focus on delivering the NHS England Forward View Plan.

A plan which this government has supported with the £10 billion increase in annual funding by 2020.

£4 billion in this year alone.

We recognise the progress the NHS is making in developing Sustainability and Transformation Plans.

And we recognise, too, that in addition to the funding already committed, some of those plans will require further capital investment.

So the Treasury will work closely with the Department of Health over the course of the summer as the STPs are progressed and prioritised.

And at Autumn Budget I will announce a multi-year capital programme to support implementation of approved high quality STPs.

In the meantime, my RHF the Health Secretary expects that a small number of the strongest STPs may be ready ahead of Autumn Budget.

And so today I am allocating an additional £325 million of capital to allow the first selected plans to proceed.

I have one further announcement related to the NHS.

The social care package I have announced today will help to free up beds by easing discharge of elderly patients.

That is one of the two big pressures on our hospitals.

The other is inappropriate A&E attendances by people of all ages.

Experience has shown that onsite GP triage in A&E departments, can have a significant and positive impact on A&E waiting times.

I am therefore making a further £100m of capital available immediately for up to 100 new triage projects at English hospitals in time for next winter.

Mr Deputy Speaker – this government backs the NHS’s plan.

We are funding it with a £10 billion above inflation increase by 2020;

We have addressed the pressures on the NHS from the social care system with a total of £9.25 billion additional resource.

We will protect the NHS from the effects of the changed personal injury discount rate, and have set aside £5.9 billion across the forecast period to do so.

And today we have made a clear new commitment to fund a capital programme for the implementation of high quality STPs, with a first down-payment for the early pioneers.

Mr Deputy Speaker, we are the government of the NHS.

Because we have not just the commitment and the will but also with the economic plan that will secure the future of our most important public service.

Mr Deputy Speaker,

Last November, I set out our plan to build an economy that works for everyone.

To enhance our productivity and protect our living standards.

To restore our public finances to balance.

And to invest for our future.

Today’s OBR report confirms the continued resilience of the British economy.

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